The Nation : Some Advice to the New Kid in Town: Just Remember You’re a ‘New Democrat’ : Government: Democrats have long been smeared with the ‘tax-and-spend’ label. But the ‘New South’ governors proved their fiscal mettle.

As Washington’s summer begins to sizzle, the Clinton Administration at times has resembled an iceberg hitting the tropics. The fella who won in 1992 as a “different kind of Democrat,” is tagged in 1993 as just another tax-and-spend liberal.

This is grossly unfair. Bill Clinton is the first genuine fiscal conservative to occupy the White House in 12 years. He balanced 10 state budgets in Arkansas, and his ambitious budget plan would slash $500 billion from the $1.5 trillion in projected deficit spending he inherited from Ronald Reagan and George Bush.

But politics is not about fairness. Politics is about perception. The perception is that Clinton’s $16-billion stimulus package was chock-a-block with pork, and that his current deficit-reduction bill is top-heavy with new taxes. Throw in a pricey haircut, a coup in the travel office, a string of dubious nominees and--presto!--a mid-June meltdown.

Enough! It is time for the President and his troops to rally anew under the “New Democrat” battle flag. Let his message be simple and relentless: radical deficit reduction.

Bear in mind that Clinton’s political challenge in June remains the same as in January: to burnish his credentials as a “New” --i.e. fiscally responsible--Democrat, to co-opt a big chunk of the Perot constituency and then to forge a decisive electoral majority for 1994 and 1996.

Clinton is familiar with this terrain. He knows that today’s New Democrat is kissing kin to the “New South” Democratic governors who first won office in the late 1950s. They, too, faced public resistance to activist government and progressive reform. But they won a hearing by first establishing their credibility as no-nonsense fiscal taskmasters.

Take my own experience as governor of South Carolina, from 1959-63. I faced the stark necessity of cleaning up my state’s fiscal mess as a prerequisite to attracting new industries. Using the line-item veto, I worked with the legislature to balance the state budget and win the first AAA credit rating of any Southern state. This did indeed create an attractive business climate. Just as important, it translated into credibility and political capital that I cashed in on less popular initiatives: arm-twisting the legislature to fund a statewide technical college system, raising taxes for education and other needs, integrating Clemson University.

Over the decades, this pattern was repeated by many New South governors--including perhaps the most successful New South-New Democrat governor of the 1980s, Clinton. Now Clinton must bring this pattern to his presidency: First serve the spinach, then the sundae.

Let’s be blunt about Democrats: Most Americans don’t trust us to spend their tax dollars frugally. Reagan and Bush could kite $3 trillion in hot checks on defense while quadrupling the national debt, and the public still perceived them as fiscal tightwads. But if a Democratic President presumes to ask for $16-billion in economic stimulus, he is savaged as “just another tax-and-spend Democrat.”

The antidote for this poison is patience. Yes, there is a long-term investment deficit and social deficit--but in the short term, America is being killed by the budget deficit.

So, patience--and discipline. This means taking the President’s stew of big-bucks, big-D Democratic policy initiatives, and putting them on the back burner. Let them simmer there--tightly covered--for two years until after the 1994 mid-term elections. Meanwhile, put the deficit on the front burner.

This will serve three purposes. First, it brings high definition to the heretofore fuzzy Clinton presidency. As Reagan defined his first Administration by cleaning up the mess--15% inflation and 20% interest rates--left by Jimmy Carter, Clinton will define himself by sweeping away the fiscal ruins of Reaganism.

Second, a focus on the deficit will be a bold play for the Perot vote. Clinton cannot govern authoritatively--nor can he count on reelection--with the 43% share he won in 1992. History dictates that presidents elected by plurality in a three-way race devote their first term to co-opting the third party. After the 1912 race, Woodrow Wilson adopted virtually every plank of the Bull Moose platform. After the 1968 election, Richard Nixon won over the George C. Wallace crowd. In similar fashion, Clinton must pass the test he has thus far flunked: giving Perotistas a compelling reason to realign themselves behind deficit-hawk Clinton.

Third, a single-minded assault on the deficit will allow Clinton to banish the tax-and-spend bogyman dogging Democrats since Lyndon B. Johnson. If he can slay this beast, Clinton will create an opening in the years beyond 1994 to move forward with an equally bold agenda of social and economic reform.

Certainly, the President’s $500 billion deficit-reduction plan is a fine starting point. But it remains, at best, half a haircut.

So once the current deficit-reduction bill is signed, Clinton must up the ante by proposing a second-phase package of deep budget cuts and, yes, tax increases aimed at bringing the deficit below $100 billion by 1997. Simultaneously, he must explain to the American people--on national TV and in speeches across the land--the full, hellish scope of Washington’s runaway deficit spending.

Then let Clinton squeeze the Washington lemon until the pips squeak, starting with the following:

* Eliminate a baker’s dozen of high-profile programs, beginning with three slabs of federal pork based in Texas: the superconducting super collider, the space station and the V-22 Osprey vertical-takeoff airplane.

* Reap as much as possible of the $100 billion-plus in entitlement savings now; don’t wait for health-care reform to pass.

* Pass the line-item veto and use it.

* Raise the profile of the Deficit Reduction Trust Fund and put teeth in it by requiring across-the-board spending cuts if the fund falls below targeted levels.

* Enact a value-added tax on consumption. This will increase the savings rate, boost U.S. competitiveness and raise a huge sum of money--every dime to be banked in the Deficit Reduction Trust Fund.

It is Clinton’s choice. He can continue his current contradictory course, calling simultaneously for modest deficit reduction and major new spending initiatives. He will likely get neither. And he risks losing the Senate in 1994 when 21 Democrats and only 13 Republicans are running. These setbacks would collapse his Administration and kiss off Democratic presidential hopes for a generation.

Or he can pursue this alternative course--one rooted in the New South past and the New Democrat present. By defining himself as the Daddy Rabbit of Deficit Reduction, Clinton can clean up the mess left by the Republicans, lay claim to the Perot vote and win the credibility he needs as a Democrat to pursue a progressive agenda. Our President is feeling the heat. Now he must see the light.